January 30, 2003 1:03AM (UTC)

In the coming weeks, Sharon will have to put together a stable coalition government, deal with the stalemated conflict with the Palestinians, lead his country through the expected war in Iraq, and approve deep budget cuts. And to top it all off, Sharon and his sons face criminal investigations, which were made public during the election campaign.

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The elections handed Sharon a bigger victory than expected and dealt a blow of historic proportions to the Labor Party, which has been the dominant political force in Israel for most of its history. TV exit polls showed a clear victory for Sharon's Likud ("Unity") Party, which won 32 to 36 seats in the 120-seat Knesset, the Israeli parliament. (In 1999, Likud came in second with only 19 seats.) The other stunning victor was Shinui ("Change"), the "secular and middle class party" led by Yossef ("Tommy") Lapid, a former TV personality who ran on a platform attacking the Orthodox religious influence over Israeli politics and society. Lapid's party won a remarkable 14 to 17 seats, up from just six in the outgoing parliament.

The Labor Party suffered a debacle: Despite scandals that rocked the Likud, a collapsing economy and a dreadful security situation, it captured only 17 to 19 seats, down from its victorious 26 the last time.

Smaller numbers of seats were garnered by the so-called "sectorial" parties: the Oriental Orthodox Shas, Israel's fasting-growing party over the last decade, with nine to 13 seats; the extreme rightist National Union, seven to 10 seats; the nationalist-religious Mafdal, four to five seats; the ultra-Orthodox Torah Judaism, four to five seats; the Russian immigrants' Rising Israel, three seats; three Arab parties with 10 seats; and the labor unions' One People, with three seats.

In another blow to the staggering Israeli left, Meretz, the left-wing party, won only five to eight seats, down from the 10 it won last time. Its leader, Yossi Sarid, announced his resignation.

The complexities of Israel's multiparty system make coalition-forming a delicate, and necessary, political art: No party in an Israeli election has ever gained the 61 votes needed for a majority. This time around, the task is more demanding than ever before. Sharon's preferred option is to renew his partnership with the Labor Party in a "national unity government," a move that during the past two years shored up his domestic political situation and enabled him to project a relatively moderate image abroad. But Labor leader Amram Mitzna has pledged to keep Labor out of the coalition, because of disapproval with Sharon's policies and in order to rebuild his party as a viable opposition. In the wake of Labor's crushing defeat, it remains to be seen if Mitzna will be able to keep his leadership and fulfill this pledge, or will be ousted soon by his rivals in the party, led by Shimon Peres and Binyamin ("Fuad") Ben Eliezer, the former foreign and defense ministers, both of whom favor returning to the coalition.

Shinui, the election's surprising upstart, has vowed it will only join a "secular unity government" with Likud and Labor; it will refuse to serve in a coalition with its anathema, the Orthodox religious parties. If both Labor and Shinui keep their campaign promises, Sharon will be forced to form a right-wing coalition with his ideological partners from the settlements and the religious groups. Such a government would have a narrow parliamentary majority, but its extreme rightist members are bound to throw it into a policy collision with the United States. (The far-right parties advocate such policies as "transferring," or expelling, Palestinians from the occupied territories.) Sharon knows this all too well, and desperately wants to avoid this option. And last but not least, Sharon will have to make some tough choices among his party leaders, when assigning Cabinet portfolios.

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The source of the fragmentation of Israeli politics lies in the system itself. During the last decade, Israel tried two constitutional changes, both of which have failed. To break a deadlocked parliament in the early 1990s, the election rules were changed, to allow voters to vote twice -- once for the prime minister, a second time for a party. The experiment backfired, however. Instead of strengthening the prime ministership over the parliament, the new system strengthened the smaller parties, as many voters split their loyalties: They voted for a prime minister, and then voted for their party along sectorial or ethnic lines. The two main parties, Likud and Labor, which together held 95 seats after the 1981 election, shrank to only 45 seats in 1999. Hoping to resume stability, Sharon's first act as prime minister was to reinstall the old party-based election system and do away with the direct prime ministerial vote. Unfortunately, that failed too. Voters had gotten used to supporting their pet parties, and the system remains fractured into small political pieces.

The 2003 campaign was perhaps the dullest in Israel's rocky history, as shown by the voter turnout of 69 percent, the lowest ever. Despite pundits who asserted that the nation faced a "critical decision," the voters reacted with boredom. Even the propaganda was dull: Sharon's victory was preordained, and policy issues were hardly discussed.

The only thing that broke the electoral tedium was a flood of corruption allegations about the Likud's Knesset candidates. These stories, hitting the press after the party's primary, prompted a police investigation, which destroyed Sharon's hope to reposition the Likud as the dominant party with 40 seats. Then came the disclosure that Sharon himself was being investigated over a $1.5 million loan given to his son as collateral for paying back old campaign debts. At that point, in early January, the polls showed a narrowing gap between Likud and Labor; there was even speculation that Labor might defeat its rival outright.

The crisis prompted Sharon to give his version of Richard Nixon's "Checkers" speech. In his appearance, Sharon fiercely lashed out at his opponents for conspiring against him. Luckily for him, the live television broadcast of his speech was shut off by order of Justice Mishael Cheshin, head of the state's election committee, for being "illegal propaganda." (Under Israeli law, candidates are not allowed to make explicitly political speeches on TV or radio in the run-up to an election.) Portraying himself as the victim of the "leftist" press and the judicial system, Sharon managed to turn the tide back and escape defeat. A few days later, after a hurried special investigation, the whistle blower was found: a justice ministry lawyer, who leaked the Sharon investigation document to the daily newspaper Ha'aretz for "ideological" reasons. The press was angry about the criminal investigation of the reporter involved, but Sharon won his points anyway.

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Sharon's victory -- he is the first Israeli leader to win reelection since 1988 -- appears surprising, since it is totally unrelated to his poor job performance. By any measurable standard, Israel's situation worsened under his leadership. Hundreds died and thousands were wounded in Palestinian terror attacks, with no end in sight. The economy declined drastically, as the GNP shrank, unemployment soared and the currency was devaluated. Public morale reached historical lows, and Israel's international position deteriorated. Sharon's sole achievement has been the strong support of American President George W. Bush, who lent a helping hand to his friend "Arik" even during the election.

Why did he win, then? Three reasons come to mind: ethnicity, leadership and policy. The social factor is crucial in elections everywhere, since most people vote according to family, community and peer loyalties. And the current composition of Israeli society gives the advantage to the political right. Following decades of deadlock, the "Russians," the newly arrived 1 million immigrants from the former Soviet Union, turned the balance in the right's favor, joining with the religious, the settlers, and the Oriental or Sephardic Jews, who tend to make up the poor and lower-middle classes. The left is dominated by the Ashkenazis, or European-ancestry Jews, who form the middle and upper classes, and the Israeli Arabs. Israel was founded by Ashkenazis, who have always comprised the country's economic and intellectual elite, but their monopoly on power was broken in 1977 by the Likud's Menachem Begin, who drew much of his support from Oriental Jews, and ever since then the Ashkenazi domination has been challenged by the Orientals, the settlers and the religious. Labor remains popular with the elderly, but it has virtually no support among the young, Russian-speaking Israelis, who favor the Likud and its satellites.

The swing bloc in Israeli elections is comprised of middle- and upper-middle-class voters, who supported the left's peace agenda and economic platform during the 1990s, when Labor was led by the ex-military, security-oriented leaders Yitzhak Rabin and Ehud Barak. To woo these voters, both major parties tended to blur their ideologies and play the leadership card. This time, Sharon enjoyed the advantage of experience, conservatism and personal charm, all of which kept his approval ratings high. By contrast, his rival, Mitzna, is a rookie, who had no political record at the national level. Sharon's rise followed the failures of his predecessors, Binyamin Netanyahu and Ehud Barak, who took office as great young promises and blundered. But even they were nurtured for years as future leaders in the public mind. Mitzna came too late to become a known entity.

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Mitzna had also a policy problem. He started his campaign by pledging to resume the peace process with Yasser Arafat, picking up from the point at which it collapsed two years ago. That was the right note to win his party chairmanship, but the wrong one for the general public, which, after the peace process failure, views such positions as too far to the left. Barak and Sharon convinced Israelis that Arafat is "no partner" for negotiations, and there is no point in dealing with him. And if the war is going to go on anyway, the public wants Sharon, who they know will hit the Palestinians harder than any Labor leader.

As a result, voters who were disappointed by Sharon's failures and Likud corruption defected to Shinui, rather than vote Labor. For many Israelis, the faults of Likud were not a good enough reason to bring Arafat back as a negotiating partner. Lapid's team of unknown candidates, mostly lawyers and other white-collar professionals, presented a clean image, and shrewdly blurred their positions on security and foreign policy. Lapid had also kept his word from the 1999 campaign, when he pledged not to join a coalition with Shas, the Orthodox Oriental party. Shinui's platform was attractive to many voters who strongly disapprove of the growing power of the Orthodox parties, whose devotees are exempt from military service and live mostly on government welfare. That process deepened in the last decade, when Israeli society became much more secularized and Westernized.

Throughout the campaign, Sharon repeatedly complained about the "unnecessary" early elections, and for a good reason. He is acutely aware of the difficulties ahead. When Sharon's new government takes its oath of office, sometime between mid-February and early March (the deadline for coalition forming), its every decision will be dependent upon American support. Bush, and not Sharon, will be the final arbiter of Israeli policy.

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Sharon needs every bit of American support. On the Palestinian front, Sharon seeks to avoid an internationally imposed settlement, which would force him to freeze settlement construction and accept an interim Palestinian state by year's end. Sharon told fellow ministers that he will move quickly toward a political process with the Palestinians. His platform is his hard-line interpretation of Bush's June 24, 2002, policy speech, in which the president demanded that Arafat step down and put the onus on the Palestinians to move the peace process forward. In Sharon's version, Israel will not make any concessions before the Palestinians stop fighting, Arafat is kicked out to a figurehead position, and a new, "reformed" leadership is put in his place. Sharon will ask Washington to ease Arafat out, and so buy more time, while enticing Labor into the coalition government with the promise of future Israeli concessions.

But Sharon's is not the only peace plan. The European and Arab states will press Washington toward a parallel process of mutual Israeli and Palestinian steps, as laid out in the "road map" proposed by the Quartet (the U.S., the U.N., Europe and Russia.) Bush will have to decide which approach to take.

On the economy, Israel asked for an unprecedented American aid package, with $4 billion in military grants and $8 billion in loan guarantees (in addition to its annual $2.34 billion aid bill). The White House hinted that it would respond favorably, to save Israel's economy from collapse. But final approval is still pending, and probably depends on Israel's behavior during the presumed war with Iraq. The United States, worried about inflaming the Arab world, asked Israel to stay out, even if Iraq attacked it, as it did in the 1991 Gulf war. American units have been deployed in Israel to strengthen its missile and air defenses. Washington has pledged to make great efforts to prevent missile launches from western Iraq. Sharon vowed to retaliate only to grave attacks, and even then, only after consulting the Americans.

Clearly, no decisions on the Israeli issues will be taken in Washington before the Iraq war. The "day after" question is contingent on many factors, such as the outcome in Iraq, the composition of Israel's new coalition, and possible escalation in the Palestinian crisis or along the Lebanon border. But most of all, it depends on the administration's postwar priorities. Israeli security officials and diplomats believe that Bush, facing reelection, will opt to ingratiate himself with American Jews rather than confront Israel as his father did in 1991. But the ever-suspicious Sharon isn't taking anything for granted. He has already appointed two policy-planning teams to prepare his new government's peace plan, based on the Bush vision.

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But before planning for the future of Israel, Sharon will have to face the real election contest with his coalition partners, while keeping an eye on the investigation storm approaching him. The weight of the tasks facing him was reflected in his victory speech Tuesday night, a solemn address in which he declared that this was no time for celebrating. The conventional wisdom in Israel predicts that the new Sharon government will not serve its full four-year term but will fall earlier, ousted either by new elections or by a leadership change in the Likud. In the second scenario, Sharon's main rival and current foreign minister, Netanyahu, will be the first in line to take control of the nation.

Aluf Benn

Aluf Benn is the diplomatic editor of the Israeli daily Haaretz and has been a regular contributor to Salon since 2001.